Narrowboats in front of restaurants on the canal at Brindleyplace, Birmingham.
Photograph: Ian Dagnall/Alamy

It has been written off in the past as London’s ugly sister, but hotels in Birmingham are reporting record bookings thanks to the city’s A-list shopping scene, Michelin-starred restaurants and eclectic social calendar.

Twenty years ago people might have listed the reasons not to go to the second city, starting with the city centre where pedestrians were faced with a concrete jungle crowned by the brutalist architecture of the old Bull Ring shopping centre.

Today it’s a different story as Birmingham hotels report 2016 was their most successful year ever, as both domestic and international tourists made a beeline to sample a roster of cultural events that spanned cricket action at Edgbaston to toe-tapping at the Birmingham and Solihull jazz and blues festival.

The city has also been given a boost both at home and abroad by the success of Birmingham-set TV show Peaky Blinders, as tourists follow in the footsteps of Cillian Murphy’s gangster Tommy Shelby by heading to the Black Country Living Museum in Dudley or on walking tours of the Digbeth area.

The new £188m Library of Birmingham, which houses the city’s internationally important collections of archives, photographs and rare books, as well as it’s lending library. Photograph: Christopher Furlong/Getty Images

“Birmingham’s industrial past meant that some people’s perceptions of Birmingham were based on the city as it was in the 70s,” says Emma Gray of Marketing Birmingham. “They had people doing industrial work and spaghetti junction in their minds, a city doing functional things. Now we’ve got high end and high street shopping, a vibrant food scene as well as cultural diversity.”

The occupancy rates for Birmingham’s hotels peaked at 99% and averaged 75% in 2016 – both the highest on record, according to the new figures from economists in Marketing Birmingham’s Regional Observatory.

The data also revealed that overnight guestsnow account for 45% of all visitors, compared to 21% in 2013. Meanwhile, the proportion of international visitorshas grown from 6% to 12%, with Birmingham proving to be a hit with European holidaymakers, particularly the French and the Dutch, as well as Americans, who are interested in cruising the Warwickshire Way or marvelling at the Staffordshire Hoard at Birmingham Museum and Art Gallery.

“We’ve just finished our most successful year on record and with a continuing increase in both overnight and international visits to the city,” says Emma Eastwood, of Hotel Indigo Birmingham.

Birmingham Selfridges, which is part of the Bullring shopping centre. Photograph: Bowman Charles/Scope-Image/Alamy

The boutique hotel in the city centre targets the mini-break market with its Marco Pierre White steakhouse and a spa that boasts pampering treatments such as a Mediterranean sea salt and algae massage.

The city’s coffers are being strengthened by the arrival of big banks, professional services firms and the planned HS2 rail link to London alongside the success of Jaguar Land Rover and other manufacturers.

Deutsche Bank opened a Birmingham office 10 years ago and now employs 1,200 people, including corporate bankers and wealth managers. This year HSBC will return its retail bank’s head office to the founding city of Midland Bank, which it bought in 1992. The move will create 1,200 jobs.

Mirroring these developments – named the Big City Plan, pints of mild and uninspiring nightlife have given way to glitzy bars, Michelin-starred restaurants and upmarket shops. John Lewis, whose former managing director Andy Street is now the Conservative candidate for Birmingham’s mayor, opened a 170,000 sq ft store in 2015. The upmarket Mailbox shopping arcade boasts a Harvey Nichols as well as Tom’s Kitchen, Michelin-starred chef Tom Aikens’ first venture outside London. There is also a branch of Selfridges in the revamped Bullring centre, while another unpopular 1960s concrete landmark, New Street station, has been subject to a £750m redevelopment, with a 74-ft-high atrium and the Grand Central shopping mall.

Street said the current boom was predominantly related to the success of businesses in the region: “Birmingham and the local area is outperforming the national economy and people are being drawn to that vibrancy, which has been made possible by a significant amount of inward investment.”

The influx of visitors to Birmingham in 2016 provided a fillip to local businesses, with the average spend per head increasing to £82 in 2016, up from £61 three years ago. Stallholders at the Frankfurt Christmas market enjoyed record takings with the event generating £400m for the local economy. The Conservative party conference also generated a £18.4m shot in the arm for the city.

The boss of Birmingham airport, Paul Kehoe, said it was also celebrating its most successful year ever: “Birmingham has become one of the great cultural powerhouses of Europe; this is an exciting time and proud moment for our city. International visitors are at a record high, as is domestic tourism.”

The airport, which currently handles 11 million passengers a year, is set for a £100m makeover ahead of the peak summer months. The investment, in preparation for the addition of 15 new routes with airline Jet2 , is expected to increase passenger numbers to more than 12 million.

There was a time when Birmingham regularly won polls of Britain’s ugliest city, but the Birmingham Perception Survey 2016, which was also released on Tuesday, showed that the city had the greatest improvement in perceptions of all major UK cities, with a growth of 23 percentage points in the last 12 months.